mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
India Records Lowest Growth in a Decade as BRICS Sputter


What happened to the BRICS?

India’s economy has grown at the slowest rate in a decade—4.8 percent in the year to March 31—according to a new government report. South Africa (which sometimes makes an appearance as the “S” in BRICS and is the largest economy in Africa) had just 0.9 percent economic growth in the first quarter of 2013. Brazil, the largest economy in Latin America, managed just 0.6 percent. Russia, meanwhile, slowed to the lowest growth rate (1.6 percent) since 2009.

The reasons for slow growth vary by country. In India, economists put most of the blame on the country’s awful infrastructure for power and transportation. In South Africa, a quarter of the work force is unemployed. Russia has been hit hard by falling commodity prices, partly the result of America’s shale gas boom. None of these quarterly growth figures are at the level governments need to maintain rising standards of living and to keep the unemployment rate manageable.

Not long ago, economists and pundits were championing the rise of the BRICS, predicting that they would soon overtake the US or join together to create a formidable bloc of developing economies that would wield geopolitical power. The truth is that these countries have serious internal economic and political problems (just look at the massacre of Indian politicians by Maoists last week) that are nowhere near being resolved.

We’re not predicting a continued slide for the BRICS, but these quarterly growth figures should serve as a sobering reminder to overly confident prognosticators everywhere.

[Indian construction site photograph courtesy of Shutterstock]

Features Icon
show comments
  • ChuckFinley

    ” In India, economists put most of the blame on the country’s awful infrastructure for power and transportation.”

    Maybe the economists ought to put some of the blame on the government rules that have been creeping back since the Industrial Raj was dismantled triggering an industrial boom that lasted for more than a decade and raising the incomes of 300 million people to the level of middle class by world standards.

    If some Indian politicians can pry the hands of the country’s bureaucracy from the throats of its businesses, India’s amazing growth can resume and the hard work and talent of the Indian people can lift the rest of the country out of poverty.

    What is going on in India now looks like what Robert A.Heinlein used to describe as “bad luck”.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service